Mass Tort Litigation Blog

U.S. News to Rank Law Firms

The U.S. News & World Report, immensely influential in education for its rankings, has announced that its October 2010 issue will include a ranking of more than 5,000 law firms in more than 125 legal practice areas.  Will mass tort litigation be ranked as a subject area?  Probably, given that U.S. News & World Report has teamed up for the ranking with Best Lawyers, which itself has "mass tort litigation" as a practice area category.  Here's the Best Lawyers press release, and here's an excerpt from the U.S. News announcement:

The ranking projects continue to make progress on the collection of client references and associate references from law firms. The vast majority of America's major law firms have provided the requested information. As with other rankings published by U.S. News, we believe that we will be able to secure from various sources quantitative data concerning those law firms that do not provide the requested statistical data directly to U.S. News and Best Lawyers. Combined with the qualitative reviews of the firms by clients —more than 50,000 client references have already been accumulated—and qualitative peer-reviews by leading lawyers, this will enable the publication of valid rankings for all major law firms, both large and small, across the United States in the inaugural year. In time, it is expected that an increasing number of the ranked law firms will participate in the process.

BGS

Toyota Recall Spurs Lawsuits and Talk of Lawsuits

The ABA Journal article is here.  Apparently class actions have already been filed by consumers who claim that their cars are now worthless.  The article quotes the Wall Street Journal quoting Richard Nagareda (Vanderbilt)

"Since it will be hard to represent a nationwide class," he said, "I don't think this litigation will be a big moneymaker for plaintiffs."

(H/T Abovethelaw.com)

ADL

Oral Argument on the Preclusive Effect of the Engle Case

In Engle v. Liggett Group, 945 So.2d 1246, the Florida Supreme Court decertified a smoker class action, but held that factual findings in a class action of cigarette smokers could be preclusive in subsequent actions by individual plaintiffs.  Now the 11th Circuit is charged with deciding whether this violates due process and what exactly the preclusive effect of the factual findings in the original class action will be in Brown v. R.J. Reynolds Tobacco Co., 08-16158.

The case was argued by NYU law professor Sam Issacharoff on behalf of the plaintiffs and Andrew Frey of Mayer Brown for the defendant tobacco company. A description of the argument can be found on Law.com.

Thanks to Richard Nagareda (Vanderbilt) for alerting me to these developments. 

ADL

"Fraud on the Market" Theories in Consumer Litigation

A very interesting post from the folks at Drug and Device Law Blog available here. Note that as everything they write, this is from the defense perspective.  As they note, fraud on the market theories allow class actions to be certified even in cases where reliance is an issue because reliance is presumed.  Should this doctrine be imported from securities law?  Apparently, most states say no.  But there is some contrary precedent.  They write:

We remind defense counsel to use this chart with appropriate caution.  In particular, there's some contrary precedent, maybe a dozen or two cases nationwide.  It mostly falls into two categories:  (1) interpretations of state securities law statutes, and (2) older federal cases, involving tag-along pendent state claims from the era of "certify first and worry later" that existed prior to the Supreme Court's crackdown on class actions in the mid-1990s.  Adhering to our policy of not doing the other side's research for them, we don't include it here.  Just be aware that there are some stray adverse cases out there, and research accordingly.

ADL

Consumer Fraud Claims for Substances in Food

BNA Law Week has an article by George Sibley and Alan Rudin called "Toxic Torts Minus Toxicity: Of Consumer Fraud Claims Relating to Food."  78 U.S.L.W. 2423.

The thesis of the article is that the proliferation of cases attacking the use of various substances in food (such as trans-fat) via consumer fraud claims rather than other types of torts (such as latent injury suits seeking medical monitoring or damages for increased risk).  According to the authors, these claims are succeeding.

We do a poor job of regulating the food supply and manufacturer representations about the healthfulness of their wares.  If you want to follow these issues from a plaintiff's perspective, Bill Marler's blog is very interesting.

ADL

Redish on Whether Class Actions are Unconstitutional

Both the ABA Journal and Forbes have recently featured Professor Martin Redish's book, Wholesale Justice.  As he points out in a comment to the ABA article, both pieces "somewhat overstate and simplify my position.  I do not really suggest that class actions are inherently unconstitutional."  The book itself is an interesting meld of class action theory, constitutional theory, and democratic theory.  Although it's impossible to summarize the book in a short blog post, here's a quote from page 231 in which he recommends three pivotal changes:

The major constitutionally dictated changes would be (1) the settlement class action (i.e., a proceeding in which certification has been sought solely on the condition that the court approve a prearranged settlement) would be held to contravene the case-or-controversy requirement of Article III; (2) all mandatory classes, with the possible exception of the (b)(1)(A) category involving situations in which inconsistent behavior on the part of the party opposing the class toward individual class members would be either impossible or unduly oppressive, would be deemed violations of the Due Process Clause; and (3) the existing opt-out structure for (b)(3) classes would be found both to violate due process and to depart from key notions of democratic theory, except in situations in which the individual claims, though sufficiently large to reasonably justify the filing of a claim form as part of a settlement or judicial award, would be insufficiently large to justify individual suit.

For the interested reader, Sam Issacharoff has written a number of articles that provide a counterpoint to Redish's arguments.

ECB

Bellwether Trials in the NuvaRing Litigation

Robin Effron (Brooklyn) over at Civil Procedure and Federal Courts Blog prints a fun quote from the NuvaRing litigation.  See this link to her post:  "Gender Theory and Bellwether Trials."

ADL

Exxon Radiation Litigation

A lawsuit against Exxon in Louisiana is underway this week. TortsProf Blog has the information and link to an article in Business Week.

ADL

Update on Collective Redress in England and Wales

Back in November of 2008, England and Wales asked Lord Justice Jackson to review civil litigation costs and how those costs affected access to justice.  He recently issued his final report (a hefty 584 pages).  BBC News calls the report a "radical plan[ ] to shake up costs of civil cases."  Here's an excerpt of the story:

Lord Justice Jackson's Review of Civil Litigation Costs is a result of a recognition that it is simply too expensive for many people and small companies to bring or defend civil cases.

"What I want to do is to focus the system so less money is paid to intermediaries and others in the process, and more money is paid to victims," he told the BBC.

"I am concerned about individuals, small businesses and others who need to use the courts."

His proposals are radical. He has looked at the factors forcing costs up in civil actions, and in particular he has focussed on Conditional Fee Agreements (CFAs), more commonly known as "no win, no fee" agreements.

Despite BBC's headline, the final report was ultimately less radical than the preliminary one, which leaned toward abolishing England's cost-shifting "loser pays" rule.  The final report concludes that cost shifting should remain the norm (even in collective actions), but excepts personal injury claims from the norm.  Whether personal injury claims are brought individually or collectively, the final report recommends "qualified one-way costs shifting" where winning claimants could recover their costs from the defendant, but generally do not have to pay the defendant's costs if they lose.

Of additional import, the final report recommends that solicitors and barristers should be allowed to enter into contingency fee arrangements, which are currently prohibited.  Before entering into such an arrangement, the report recommends that claimants receive independent advice.  It also suggests capping the fees at 25%.

Finally, the report recommends making third-party funding available to personal injury claimants (including those involved in collective actions).  It defines third party funding as "The funding of litigation by a party who has no pre-existing interest in the litigation, usually on the basis that (i) the funder will be paid out of the proceeds of any amounts recovered as a consequence of the litigation, often as a percentage of the recovery sum; and (ii) the funder is not entitled to payment should the claim fail."  (Final Report at p. 17).  Very interesting.

For additional commentary on the report, here are links to Lovells, the UK's Financial Times, and BBC News.  Whether the suggested reforms will be implemented remains to be seen.

ECB

Tort Music

On a lighter note, I thought our readers might enjoy Weird Al's video and song for "I'll Sue Ya," in which he sets the joy of tort litigation to the sounds of Rage Against the Machine.  (Thanks to my son for playing all those Weird Al videos.)

BGS

Gensler on CAFA's effect on state court class actions

Steve Gensler has posted on SSRN a new article examining the Oklahoma state court experience with class action filings post-CAFA. The paper will be published as part of the Kansas Law Review symposium on aggregate litigation since Amchem and Ortiz.  Here is the link and abstract for The Other Side of the CAFA Effect: An Empirical Analysis of Class Action Activity in the Oklahoma State Courts:

When Congress passed the Class Action Fairness Act of 2005 (CAFA), its stated purpose was to shift nationwide state-law class actions from state court to federal court in order to combat allegedly abusive state-court practices. While the Federal Judicial Center has documented an increase in class action filings in federal court, it has been quick to point out that it cannot say that CAFA has caused a shift in class action filings from state court to federal court. That conclusion would require parallel data about state-court class action filings to see if there has been a corresponding decrease. This paper provides that data for Oklahoma, a state many saw as a target of CAFA due to its having a reputation as a class action friendly forum. This study documents a significant drop in class action filings in Oklahoma post-CAFA. At the same time, though, federal filings in Oklahoma have also dropped. This across-the-board decrease suggests that CAFA has shifted nationwide class actions from Oklahoma state court to federal courts in places other than Oklahoma as plaintiff's class action lawyers now learn to forum shop the circuits as they did the states pre-CAFA. This paper also provides interim data on various aspects of Oklahoma class action practice including how often motions to certify are made, how often they are granted, and the outcomes of certified cases.

HME

Misjoinder and Mass Torts

The folks over at Drug and Device Law (now under partially new management that apparently is more fond of literary allusions than the old) have an interesting post on misjoinder, for those of you interested in the real nitty gritty of procedure.  The bottom line: they are worried about plaintiffs who jigger their cases through joinder to avoid the federal courts' jurisdiction.  For those of you not into the technical aspects of procedure in complex litigation, there are lots of federalism issues raised by this as well.

The post is called Gresham's Lawyers and is available here.  ADL

*Really* Selling Out the Class

Usually when academics and policymakers talk about class action lawyers selling out the interests of the class in favor of increasing their fees there isn't any direct proof that this is what occurred, and its always hard to second guess the outcome of negotiations (not to mention hindsight bias).  But here is a case that is quite obvious, the kind that ends up making things worse for upstanding plaintiffs lawyers.

A class action lawyer settled a class action on behalf of 7 plaintiffs, paying the class reps $7 million and himself $2 million, rather than arranging payment for the entire class. The settlement was overturned.

Now whether this is an efficient approach from an economic perspective I leave to your consideration.  But in any event its not currently permitted.  For an argument that it is more efficient to pay the lawyers than try to pay the class from a deterrence perspective, see Myriam Gilles & Gary Friedman, Exploding the Class Action Agency Costs Myth - the link is to SSRN.

The Florida Bar has recommended discipline. You can see the article here at the ABA Law Journal. 

ADL

Cadmium Warning (Children's Jewelry)

The Associated Press is reporting a study that demonstrated that there are alarming percentages of the heavy metal Cadmium, which among other things causes cancer, in certain inexpensive children's jewelry (particularly charm bracelets).  Some of the jewelry was sold at Wal-Mart and Claire's (a ubiquitous accessory chain here on the East Coast that many parents will be familiar with). 

The article from the AP is available here. 

It seems that if its not one dangerous substance (lead) its another (cadmium).  This underscores the importance of regulating consumer goods, especially children's toys and jewelry.  Trying to compensate parents after the fact for the damages caused by exposure to carcinogens, while important, will never be as good as preventing the damage in the first place.

ADL

Soldiers Suing Manufacturers and Other Companies for War Zone Injuries

An article in the Wall Street Journal -- Soldiers Fight in the Courts Over Liability in War Zones, by Dionne Searcey -- discusses recent and historic attempts by soldiers to bring suit against third parties over injuries suffered while on duty.  Barred from suing the government, soldiers have instead sued manufacturers who might be responsible for toxic exposures or malfunctions in military equipment.  Manufacturers have in turn responded by citing the military contractor defense, under which they are also given protection from liability if they manufactured according to government specifications. 

It has always seemed to me that rather than litigate the many policy issues, the better approach would be to leave it to a clear contractual waiver of lawsuits by incoming soldiers.  That way, the government could sort out the many policy concerns by itself and in negotiation with its outside contractors (who may reduce the price of products if covered by a lawsuit waiver), and then the government could instead provide extended health and disability benefits, with all parties saving legal fees.  (Such is the reasoning for police and fireman who are generally denied lawsuit rights aginst third parties, but supposedly receive more generous health, life, and disability benefits.)  Or the government may decide not to seek a contractual waiver for certain entities, and instead allow lawsuits.  Whatever the result, the complicated policy issues are addressed by military experts (and agreed to ex ante by potential soldiers), rather than by far-removed courts.  Instead, the courts are left to a more minimal and well-suited role in construing contractual waivers.

BGS

Looking Back at the Decade - and to the Future

What were the most important developments in mass torts in the last decade? 

Arguably the Agent Orange litigation represents the 1980's and Amchem represents the 1990's.  So what case most typifies the first decade of the twenty-first century? I nominate the Vioxx MDL for the honor.

The Agent Orange litigation and particularly the settlement represents the rise of settlement class actions as a vehicle for resolving mass torts.  The Amchem case (and maybe Ortiz too) represent a shift away from settlement through class actions.  Vioxx represents the rise of innovative aggregate litigation procedures for resolving mass tort cases.  It also represents the inherent contradiction in mass tort law -- the triumph of the individual proof rule in an area of the law where aggregation is the dominant method of resolution.  One thing that has remained the same, however, is the importance (no, necessity) of excellent innovative judges (such as Judge Weinstein, the architect of the Agent Orange settlement and Judge Fallon, the architect of the Vioxx settlement) to orchestrate settlement.

But there is more.  Agent Orange and Amchem are both about mass industrial and environmental harms.  But for my money the developments that have been most interesting have been in the large pharma and medical device field.  Is this because of the shift of our economy from the manufacturing to service sectors?  It certainly is related to larger trends in the economy.

The old model (or analogy) of a quasi-administrative agency that Agent Orange represents will not be the approach going forward.  I think the better analogy today is to insurance and risk spreading.  Mass tort settlements are characterized by all the problems that insurance companies face: moral hazard (i.e. fraudulent claims or "if you build it they will come"), adverse selection (can you get the high value claims in the settlement so that it is really global?), and the actuarial valuation of claims (that is, using statistical or statistics-lite methods to determine compensation). 

Notice that I don't mention the Katrina litigation or the 9-11 Compensation Fund.  These do not seem to have had the impact that Vioxx has, but I am happy to hear arguments to the contrary. 

I am writing about the issue of insurance as a model for thinking about mass settlements and thinking of putting together a conference about actuarial litigation. Interested readers should contact me directly.  ADL